Stock Photo Prices: The Future

Posted on 9/28/2017 by Jim Pickerell | Printable Version | Comments (1)

On October 23rd at the DMLA 2017 Conference in New York there will be a panel discussion on Stock Photo Prices and whether there is anything that can be done to raise them -- even slightly. I will moderate the discussion.

As everyone in the industry is well aware, prices have been steadily declining for years. The situation has gotten to the point where many photographers have given up producing stock. More are thinking about bowing out. In addition, huge oversupply has exacerbated the problem. Many creators have found that -- considering the time required -- the cost of production exceeds what they are likely to earn from the effort. Thus, when money is an issue -- and taking pictures is not just having fun or recording ones daily activities -- many photographers are moving on to other more lucrative activities.

The discussion will deal with two issues:
    1 – Is there anything that might be done to improve the situation, and
    2 – Is it likely that something will be done.
Is there a strategy for charging customers enough for production of new images to become a viable business option for more producers? If so, how?  Does the industry need more production from professionals, or will images produced by part-timers satisfy all customer needs? What alternatives are there for agencies to grow their businesses?

The following outlines two proposals that will be discussed. Anyone interested in the future of the stock photo industry may want to register for the conference and listen to the discussion. The interaction of the panelists and the audience should be very telling as to where the industry will  head next.

Note: If you are a stock agency and haven't already responded to the DMLA's recent survey, it would be helpful if you would answer the 12 question so we can get a better understanding of the degree to which pricing is affecting our business. Thank you.


Feature of Two-Tier Pricing Strategy


1 – Existing Database of Images would be segmented into images that have been licensed at least once and those that have never been licensed

2 – Image never licensed would be offered at current prices.

3 – All new images would be added to the lower priced tier and remain there until licensed at least once.

4 – Once licensed in the lower priced tier the image will automatically be moved to the higher tier for all future licensing. (See iStock as an example of two tiers. However, it is not necessary for images to be exclusive in order to charge higher prices.)

5 – Customers would be able to search the collection of “images used” separate from the general collection of “unused images.”

6 – For possible price increase strategies (http://www.selling-stock.com/Article/raising-prices )

Modifications:

1 – If images have only been licensed via subscriptiond, It may be advisable to require 5 licenses at the base price before moving the image to higher price level. (The demand for images licensed at single images prices and subscriptions is not necessarily the same.)
 
2 – Images that remain in the “used” collection for two or three years without being used again should be moved to the lower priced “unused” collection.

3 – Eventually, an additional higher priced collection might be established for images that have been used 10 or 100 times. Higher priced collections might also be based on total revenue generated by the particular image.

4 – As some point images that have remained in the “unused” collection might be placed in an even lower priced “Old Unused” collection, giving customers with real budget problems more choice with the hopes of generating at least some revenue from these images.


Features of Co-Op Distributor System


1 –It would be a searchable website that hosts image thumbnails from multiple participating agencies. The website operator would be responsible for marketing the site and for all financial transactions with customers.

2 – All member agencies will agree to a unified pricing system for images licensed through this website. Individual agencies may continue to charge different prices when licensing directly to customers.

3 – All participating member agencies would have voting control over Main Database operations and establish an Oversight Board to manage day to day operations of the website. Votes will be based on the percentage of gross revenue their images have generated for the organization in the last calendar year and thus might vary year to year.

4 – Each participating agency will maintain its own searchable website. The Main Database would have an API (Application Programming Interface) that regularly searches (daily) for any new images added to the agency’s collection and pulls the thumbnails and keywords into the main database’s offering. In the event that a Main Database customer finds an image they want to purchase the Main Database will have a separate API that goes to the Participating Agency’s database, pulls the proper hi-res file and delivers it to the customer. In this way it will be unnecessary to deliver high res files to multiple distributors and store them multiple times.

5 – Such a system should eliminate many of the middleman cuts and enable prime agencies that deal directly with contributors to receive a much larger share of the gross fees paid by customers than is currently possible with the present distributor system. It should also enable the prime agencies to pay out a much larger share of the gross fee to their contributors.

6 – The only images Prime Agencies would deliver to the Main Database would be those they have received directly from producers, and not images they might be representing from other agency suppliers. (The other agency suppliers will be able to deal directly with the Main Database, if they choose.)

Modifications:

1 – It is recommended that higher prices be charged for images that have been licensed at least once previously compared to images that have never been licensed. (See Two-Tier pricing suggestion above.)

2 – To launch such a system, any agency that joins in the first year should be allowed to designate 10% of their collection for the previously licensed category. At the end of the agency’s first year with images in the Main Database collection, any image that had not been licensed at least once from the Main Database would be moved back to the unlicensed collection until a later time when it might be licensed again. At that point the image would be moved back to the licensed collection.

In the event that an agency joins after its first year of Main Database’s operation all of its images should start out in the “unlicensed” collection.  The Oversight Board may make exceptions when it seems appropriate.

More Background


For more background on these pricing issues check out the following stories:

** Can Prices Be Raised?       9/14/2017
http://www.selling-stock.com/Article/can-prices-be-raised

Raising Prices     9/19/2017
http://www.selling-stock.com/Article/raising-prices

Raising Stock Photo Prices        4/28/2017?
http://www.selling-stock.com/Article/raising-stock-photo-prices-0

Why Would Customers Pay Higher Prices            9/19/2017
http://www.selling-stock.com/Article/why-would-customers-pay-higher-prices

** Multi-Tiered Pricing Model     3/22/2017
http://www.selling-stock.com/Article/multi-tier-pricing-model

Raising Stock Photo Prices        3/6/2017
http://www.selling-stock.com/Article/raising-stock-photo-prices

** New Stock Image Distribution System Needed       6/23/2017
http://www.selling-stock.com/Article/new-stock-image-distribution-system-needed

New Image Distribution System    6/23/2017
http://www.selling-stock.com/Article/new-image-distribution-system

More On New Distribution System          6/30/2017
http://www.selling-stock.com/Article/more-on-new-distribution-system

** Thoughts On Ways To Improve Search        7/27/2017
http://www.selling-stock.com/Article/thoughts-on-ways-to-improve-search

Are Professional Stock Producers Needed?      9/13/2017
http://www.selling-stock.com/Article/are-professional-stock-producers-needed
 
North American and Western Europe Production Declining     4/14/2017
http://www.selling-stock.com/Article/north-american-and-western-europe-production

Does Stock Industry Need Western Creators        3/17/2017
http://www.selling-stock.com/Article/does-the-stock-industry-need-western-creators-0

Top iStock Contributors Adding Fewer Images    1/5/2016
http://www.selling-stock.com/Article/top-istock-contributors-adding-fewer-images


Copyright © 2017 Jim Pickerell. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-251-0720, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of www.selling-stock.com, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to: http://www.jimpickerell.com/Curriculum-Vitae.aspx.  

Comments

  • Dale Wilson Posted Sep 28, 2017
    Should be a good debate, Jim.

    However, I should think the first agency (with deep pockets) that can revert the agency/contributor agreement back to a 50/50 royalty split will quickly gain the best and most productive pro shooters. This in turn will generate a portal with the best content, and only then can you increase the per image return to make the ROI viable for contributors.

    As you suggest, many, if not most, full time stock photographers are no longer creating and this generally shows in the quality of collections.

    Of course, the follow up question is if there is even a need for highly executed niche stock imagery in the first place?


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